The major functions of commercial banks have been described in Chapter IV as the testing and guaranty of credit, and the extension of credit by means of notes, deposits, and acceptances. Commercial banks extend short-time loans, handle short-time mercantile paper, receive deposits subject to check, issue bank notes, issue letters of credit, and accept bills drawn upon themselves. In carrying on these main activities many incidental services are performed for customers. In a circular published recently a metropolitan bank advertised "forty-three separate service divisions - all working for a single object, namely, to render a powerful and well-balanced banking service." In their competition for business, banks adapt their services to their actual and prospective customers' needs, adding feature after feature.

In this point of service, by the way, there is probably opportunity for both the large and small banks. The smaller banks can render their fewer customers services that are probably more intimate and personal than the great metropolitan banks, whereas the latter can offer facilities more powerful, varied, complete, and expert.

The accessory and minor functions of commercial banks will be discussed in detail in the body of this text. The nature of these functions appears in the statement that from his bank the business man receives the ready accommodation of a loan or the prompt cash conversion of commercial papers; he finds it convenient to keep his money and make his payments at the bank; he is advised in the purchase and sale of securities and their handling; the bank assembles vast credit files which are open to him; his funds are transmitted over distances, his foreign trade is facilitated, his business operations planned and guided for him.

From the point of view of economics, bank credit obviates the use of metallic money and conserves the metals for use in the arts; it facilitates the production, movement, and exchange of goods more effectually even than money does; it stabilizes credit, resting it upon long-established, widely extended, conservatively managed institutions. The banker determines the personnel of the business world, by extending credit to persons of character and capacity and by choosing as debtors those who have either proved abilities or give reasonable promise. Capital is thus diverted into channels and hands where it is most productive and most useful to society. The bank assembles the stray and hoarded funds of the country into its vaults and puts them to productive use. Capital is thereby conserved. The benefits of thrift are taught and the importance and equity of keeping contracts to the letter are brought home to the commercial world.